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Home , Poverty in India

Historical Roots of Mass in South Asia A Hypothesis Tapan Raychaudhuri The contemporary phenomenon of underdevelopment is not a continuation of the traditional economic order of pre-modern times. The patterns of economic organisation and levels of economic performance in the traditional societies of Asia, before they were enmeshed into the international economy created by first the merchant and later the industrial capitalism of western Europe, were significantly different from their contemporary counterparts. In the case of , the pre-colonial economy in its normal functioning did not generate large groups of half starving people. The author traces the roots of mass poverty in India, as we know it today, to the new institutional framework of agriculture introduced after 1813 which deprived small holders, both tenants and proprietors, of nearly all their surplus, if it did not actually reduce them to landlessness. Not only the new institutional arrangements, but even the positive developments in agriculture augmented the tradi- tional disparities of India's agrarian society. Thus development of a market for cash crops implied a change in the ratio of non-food crops to food crops until, with increases in population, the output of foodgrains per head of population declined quite sharply. And where irrigation provided the means of increasing productivity, those in control of large holdings tried and increased their holdings, often at the cost of the poorer agriculturists. The all-too-familiar phenomenon of today's mass poverty was thus already an established fact of life by the

time population began to increase at a steady pace. Thereafter, given the pyramidal structure of rural societyt there was a concentration of the increasing numbers in the lower rungs, until the very poor accounted for a hall or more of the rural population. THE approach and method adopted in , disease, reduced longevity and sufficiency in food achieved by the Indian this essay are very much those of what is ignorance. In any Third World country Union has not, so far as one knows, af- now described as 'old economic history'. the phenomenon is obvious to any casual fected the quantum of food consumed per This implies an emphasis on the qualita- observer, and objective assessments only head by the rural poor. Nor has the tive rather than the quantitative, on help to confirm with some precision the emergence of India as a major industrial arguments historical rather than econo- first impression'of untrained eyes. One of nation made any significant difference mic in their essence. Of course, any such the less complex definitions of poverty to the percentage of people below the distinction is, beyond a point, artificial. equates it with levels of income barely poverty line. In one view, the percentage The reason for this preference goes enough to secure the minimum of food— has actually increased. Without getting beyond deficiencies in one's training i e, caloric intake—required to sustain the involved in that rather inconclusive which are considerable. Where quanti- human body. In recent years, it has been debate, I would like to emphasise a cen- tative data are not available—on such estimated, some 45 per cent to 53 per cent tral fact: growth and development have crucial matters as national income and of the rural population in the territories by-passed a very large section of the population—the attempt to squeeze the of the Indian Union have had incomes population which remains hopelessly blood of aggregated series from the stone around or below that level. The situation poor. I shall later argue that this end of fragmentary evidence is more coura- in the sub-continent as a whole is surely result is built into the historical cir- geous than prudent. Secondly, this paper not better. In other words, somewhere cumstances which explain the emergence is an attempt to present in a few pages the between 250 and 300 million people are of mass poverty in South Asia. main ideas in what, hopefully, will emerge in conditions of near starvation in that some day as a medium-sized volume. part of the world. These figures represent MYTH OF OVERPOPULATION Some of the statements are hence in the something like 2½ to 3 times the number Students of economic underdevelop- nature of shorthand: the very consider- of the sub-continent's estimated popula- ment have recognised for some time that able differences over space and time are tion around the year 1600. Two other the contemporary phenomenon of under- 'de-emphasised' and the focus is on the well known facts from the contemporary development is not a continuation of the uniformities rather than the variations situation have a relevance to our under- traditional economic order of pre-modern without, one hopes, distorting the essen- standing of the historical process which times. The patterns of economic organisa- tial historical reality. Finally, the impre- generated this phenomenon. First, not tion and levels of economic performance cision which marks most of the state- every one in South Asia is poor. Leaving in traditional societies of Asia, before ments which follow is not accidental. It aside the Birlas, the Tatas and Pakistan's they were enmeshed into the international represents what, to my understanding, is 200 families, there is a large slab of urban economy created by first the merchant the closest approximation to our present and rural population with a very comfor- and later the industrial capitalism of level of knowledge and possible per- table and rising standard of living. These western Europe, were significantly dif- ception. are the beneficiaries of the very substan- ferent from their contemporary counter- Let me begin with an imprecise defini- tial growth achieved by the territories in parts. To take one elementary fact into tion. Mass poverty is a situation where question, which is the second well known account, the prevalent image of the very large numbers in absolute terms and fact I wanted to emphasise. True, per underdeveloped world today is one of a very large percentage of the population capita income remains low in South Asia overpopulation. For the Indian sub- suffer from a chronic shortage of food but it is not so low as to keep consump- continent, such a description would have and other basic consumer needs like tion at the level of bare subsistence or been of very little relevance as late as 1921 clothing, adequate housing, medicine and below it for such vast numbers. What when its population was below one-third education and hence are victims of ill- is perhaps more important, the self- of the present level. In the seventeenth

Economic and Political Weekly Vol XX. No 18, May 4, 1985 801 May 4, 1985 ECONOMIC AND POLITICAL WEEKLY century, the corresponding proportion of liberty and break-up of their families, nest-eggs, contributed to the inflationary was probably nearer to one-eighth, and the ultimate horrors of famine and situation at times of famine. though one estimate puts it as high as war reducing multitudes to utter destitu- The rural scene is in many ways more one-fifth. To take a different criterion, tion. None of these observations are complex. First, one encounters a wide Kuznets estimated that the income per fallacious in themselves, but taken with variation in levels of economic perfor- head of population in the traditional other evidence and read between the lines, mance. An outstanding example of high societies of Asia was probably higher than they do not, I submit, project a picture agricultural yield and plentiful supply of that in the pre-industrial phase of modem of mass poverty or at least anything every variety of food-stuff was Greater industrialised nations. In the Indian case, remotely comparable in magnitude to the Bengal, a region free from recurrent there is some direct evidence to support contemporary phenomenon to which we famines for some two centuries down to such a proposition. The Ain-i-Akbari apply that term. 1770. The bulk of such areas, which gives the average yield per unit of three included Malwa in Central India and qualities of land—good, medium and in- POVERTY IN PRE- Awadh, was characterised by what may ferior. A well known Indian statistician be described as 'affluent subsistence', i e, Let us first consider the urban aspects has estimated that the wheat yield for an economy geared to production for pur- of the question. While destitution was not Abul Fazl's medium quality land com- poses of consumption rather than ex- unknown—I shall try to explain its eco- pares well with the highest yield of post- change, but having high levels of output nomic origins later—not one observer Green Revolution Indian agriculture. Early and consumption attained with relative mentions the army of deformed or star- 19th century accounts of yield per acre in ease and rather small inputs of labour, ving beggars one invariably encounters in Awadh, in eastern UP—then described as permitting a fair measure of slack which the towns and cities of South Asia today. the 'garden of India', now a chronically could be taken up as and when the Housing of all but the wealthy was con- deficit area—quotes figures which are economy responded to market incentives. structed of flimsy material, but again we higher than those available for England In areas characterised by such abundance hardly come across any descriptions ot after the agricultural revolution. The of food-supply—parts of which were ac- urban slums in the writings of the 17th implications of such nearly incredible tually exported—inadequacy of food and and 18th centuries. The urban poor who evidence, confirmed by Buchanan- clothing was unlikely to have been the lot evoked the sympathies of the Dutch fac- Hamilton writing in the first two decades of large numbers, whatever the pattern of tor, Pelsaert, were mostly artisans and of the nineteenth century, have to be income distribution. The possibility of shopkeepers subject to the arbitrary tempered with reference to a negative fact such shortages affecting sections of the demands of the nobility who, allegedly, he mentions, namely the uneconomically population cannot, however, be preclud- paid them little and often enough only high ratio of crop to seed as compared ed for less fortunate regions, especially with strokes of the Korah, or the cat-o'- with Europe at that time. Still the central those like the South Coromandel coast nine-tails hanging at each nobleman's fact relevant for our purpose is beyond which habitually imported food from the door. The same artisans, according to his doubt: a very favourable man-land ratio, surplus areas. However, the pattern of own account, could however afford ghi and a technology evolved from long expe- regional variations suggests that the fate with their evening meals—incidentally, rimentation to make the best possible use of the agrarian classes, often described by beyond the means of all but the affluent of given resources, generated very high the foreign observers as semi-servile in in contemporary India. In the illustrations yields both per unit of land and per head view of the rapacity of the ruling classes, of the "Ain-i-Akbari", the artisans are of population. If economic underdevelop- was at least not uniformly miserable. shown as wearing simple tailored upper ment as we know it today is not a pre- and lower garments, head-dresses and modern phenomenon, one of its characte- In fact, the economic consequences of footwear—more than most of their con- ristic manifestations—food deficit—is a rapacious ruling class and a very high temporary counterparts can afford. The certainly even less so, at least so far as the level of revenue demand have apparently pay scales mentioned in the same account South Asian sub-continent is concerned. been misunderstood by the foreign cover a range which would allow, accor- observers upto a point, as their own One could still argue that since pre- ding to the food prices quoted by Abul evidence indicates. First, the rapacity of modern technology and pre-capitalist Fazl, a reasonable to very comfortable the ruling class—despite the system of economic organisation implied inflexible existence, though by no means anything frequent transfers of revenue-extracting ceilings to per capita income, and vast approaching wealth. The Mughal cities officials—was limited by their own self- disparities in wealth and income were and camps on the move attracted such interest. The hereditary surplus-extracting characteristic features of the pre-colonial artisans, workers and petty shopkeepers cultivating had a long-term in- Indian economy, mass poverty could still by the thousand and at times hundreds terest in the survival and prosperity of the be one of the negative inheritances from of thousands, without the incentive of the peasantry and often acted as a buffer the pre-colonial past. In fact, some of the Korah. In an agrarian economy with plen- against the more transient class of offi- evidence from Mughal times would sup- tiful supply of land and a small popula- cials. The official class itself, besides port such a conclusion. All foreign tion where shift to agriculture from other being limited by their own organisational observers of the Mughal economic scene occupations was always possible, the type inefficiency, had to reckon with the fact invariably emphasise the contrast between of response just mentioned suggests that that people, not land, was in short supply. the spectacularly conspicuous consump- pull rather than push factors were at The oppressed peasants could always pro- tion of the Mughal nobility and the work. And since such people were the test with their feet, migrating en masse to meagre livelihood of the urban artisans, core of the city poor described by the areas where their welcome would take the the relative absence of a middle class in foreign observers, we do not see in them form of reasonable demands on their out- northern India, the extreme arbitrariness the pre-colonial counterparts of contem- put. That they protested often enough of the ruling class vis-a-vis the peasantry, porary mass poverty. In fact, they are ac- with guns, bows and arrows and success- who had to yield up 50 per cent of the tually reckoned among the petty hoarders fully defied unreasonable claims is gross produce to the state on pain of loss of gold and silver who, by disgorging their evidenced by the foreign accounts as well

802 ECONOMIC AND POLITICAL WLUKLY Ma\ 4, 1985

as indigenous sources. The widespread No CHRONIC FOOD SHORTAGE parts of the country—without recourse to use of fire-arms by the peasantry itself forced labour—indicates the existence of suggests a level of income well above a fairly sizeable floating population. War subsistence. It is also known that such In all probability, if we are looking for and migration probably contributed to peasants as successfully defied the land the seeds of mass poverty in the pre- their numbers. The question as to why revenue demand were exceedingly pros- colonial economy, the structure of agra- such displaced sections of the rural perous. It is unlikely that the Mughal state rian society, inter-acting with the population, like the migrant agricul- could as a rule collect the 50 per cent of rapacious tendencies of the Mughal jagir- turists, did not take advantage of the the produce Which at times was the level dars, does provide a clue. The pre- abundant supply of land is not easily they did aim at. The state's concern with colonial village in India was nowhere an answered. Capital, even the small quan- agricultural prosperity was also real, be- undifferentiated egalitarian society. While tum required to start cultivation or ing rooted in self-interest as well as a its structure varied from region to region, reclaim land, was not in abundant supply conscious ideology. The concern was ex- it contained everywhere a top layer of and the phenomenon of low caste village pressed inter alia through the system of "superior rights' in land—usually a group servants living on the margin of sub- revenue itself which imposed lower rates belonging to high or agricultural castes sistence even in normal times suggests that of demand per unit of land if the more who emerged as full-fledged proprietors entire social groups were excluded from highly priced cash crops like indigo, if a land-market developed—another any access to it. To repeat, the historic opium or mulberry for purposes of seri- group with equally hereditary rights, but roots of mass poverty are probably culture were cultivated. In other words, comparable in terms of village servants traceable to the existence of these social both variations in the natural levels of producing goods and services mostly, but groups on the margin of subsistence in productivity as well as the operations of not exclusively, in return for hereditarily rural society. However, some facts are state policy permitted differences in fixed shares of the village produce. This worth emphasising in this context. wealth and income in the agricultural sec- third group included service castes whose Neither the a priori conclusions derived tor, both as between regions and within professions were considered defiling and from the known facts of man-land ratio the same region. One end of the spectrum whose perquisites were'very small and nor the direct evidence available indicate was surely close to modest affluence, if others who had duties on land but no sort any chronic shortage of food supply in not substantial wealth. The contemporary of recognised rights to it. In parts of part of the sub-continent (deficit areas be- accounts emphasising the arbitrariness of southern and ( and ing supplied from food surplus regions). the ruling class project a blanket picture the Deccan), the third group contained an The most distressing feature of contem- of rural misery which thus does not stand important part of the work force in porary mass poverty is inadequate supply up to scrutiny. The expansion of exchange agriculture—agrestic slaves and serfs of food. This phenomenon was, at least activity in the countryside, fostered by the without any rights in lands but cultivating until recently, linked both to inadequacy increasing collcction of revenue in cash it for proprietors belonging to superior of total output and availability, as well and facilitated as much by the cross- castes and receiving what was in all pro- as of purchasing power. At least the first country roads built by the Mughals as by bability a bare subsistence. The lowly ser- of these two deficiencies was absent from the influx of bullion from the new world, vice castes without rights to land in the the pre-colonial scene. In rural India, the and evidenced by the 3,200 qabas or rural northern regions were unlikely to have supply of food was dependent on the pro- market-towns mentioned in the "Ain", fur- been better off. In normal times such ducer's own effort or, in case of those not ther suggests the existence of focal points groups evidently had enough to live on. deriving their livelihood primarily from of prosperity in rural-agrarian society. In This is a logical assumption for an their family holding of agricultural land, short, the rapacity of the nobility was real. economy producing an abundance of on the share of the village produce The resilence of the agrarian economy, its basic consumer goods, and that for con- customarily allocated in return for ser- capacity to evade, curb and survive that sumption rather than exchange. There is vices required. In a situation of relatively rapacity and thus enjoy at least some no economic incentive to starve a section high productivity—one can assume—even share of the benefits derived from abun- of the work force in such a situation. But the small family holdings must have pro- dant supply of obviously very fertile land, in times of famine, or when warfare duced yields, net of all liabilities including was no less so. The economy which sup- dislocated production, they were the first revenue demand, which guaranteed at ported the colossal structure of the to be pauperised, that is if they did not least an adequate supply of food, pro- Mughal state and rendered possible its actually perish. Describing the Great bably much more. As to the hereditary monumental constructions obviously Famine of the 1630s, Peter Mundy men- village servants, even the lowliest of them generated a very large surplus. It is unlike- tions regular movement of grains and are unlikely to have lived for generations ly that a level of output from which such shops full of food-stuff and people dying on the brink of starvation when food was extraction was possible could be maintain- within sight of both for lack of money to available in plenty, however inegalitarian ed for nearly two centuries without posi- buy. The lowest strata of the rural the character of Indian rural society. True tive incentives to the producer. The known population, perhaps without even the nest pauperisation was hence, in all proba- facts regarding the Mughal polity cannot egg of hoarded silver or gold to fend off bility, the result of abnormal, if recurrent be squared with any picture of a uniform- the first onslaught of scarcity, were no circumstances, and the subsequent failure ly immiserised peasantry. The question to doubt the first victims. If they survived, to resume the customary economic func- ask then is whether, despite very high the chances were that they did so as tion. Such displaced elements may well levels of output rendered possible by paupers. It is unlikely that such flotsam have included segments other than the abundant supply of fertile land and, and jetsam were all easily accommodated lowliest service castes, but the better off despite the evidence for considerable within the structure of established rural with their cattle stock and small savings agrarian prosperity, large sections of the communities. The relatively easy availa- had more sustaining power and hence bet- rural population suffered from extreme bility of general labour for road building ter chances of recovery, If, then, the hard poverty, especially near-starvation. and other public works, in even remote core of absolute poverty is to be sought

803 among the displaced bottom strata of ser- the rapine associated with the downfall back with fortunes estimated in millions vice castes, one must remember that they of the , the Maratha ag- —had disastrous effects on the economy, constituted a small percentage of the rural gressions and the establishment of British at least in the short run. The large scale population. In the north, the bulk of the rule subjected the economy of vast areas abandonment of cultivation, a direct work force in agriculture accounting no to continuous shocks from the 1680s to response to unbearable revenue demand doubt for the great bulk of the popula- 1803 and in some cases, like Awadh and and the pressures to buy and sell at dic- tion consisted of the 'right-holders' family the Punjab, even much later. tated prices—which contributed to the labour, so that castes with duties on, but Famine of 1770, killing off something no rights in land, constituted a small ECONOMIC CONSEQUENCES OF between a third and a fourth of the minority. Even if we add to this the lowly EMPIRE-BUILDING population according to the company's In considering the record of the col- non-agricultural service castes, the total estimate—has no recorded precedent in numbers could not have been large. In the onial era, it is necessary to emphasise the Indian history. In Madras, the English south, the low castes in semi-bondage or relevance of a very obvious but often creditors of the Nawab of Arcot held the actual bondage played a more important forgotten fact—that there were two revenue of several districts as ransom and role in agricultural production. This fact, distinct phases of colonial rule in the sub- acted more like usurious moneylenders however, is likely to have facilitated their continent. In the earlier phase, the East than administrators. Oudh under the Sub- rehabilitation after economic catastro- India Company's monopoly shielded the sidiary Alliance suffered a similar fate. phes. Such circumstancial evidence sug- territory from virtually all impact of in- These horror stories of the period of gests that those who did not have enough dustrialisation in Britain, so that the plunder are of some relevance to our to live on could have accounted only for characteristic features of colonial trade enquiry. India was certainly not a stranger a small proportion of the rural popula- and all associated phenomena, postive or to war and rapine. But together with tion in pre-colonial India. By no stretch negative, could emerge only after that Aurangzeb's devastating wars in the of imagination could this population have monopoly was effectively undermined Deccan in the last quarter of this 17th been anywhere near 45 per cent. The in 1813. In the first half century, and for century and the intensive plunder under- direct evidence bearing on the question— some regions like Oudh much later, taken by the Marathas in the 18th cen- the substantial body of descriptive the economic consequences of empire- tury, the Company's exercises in rapacity accounts—supports my conclusion. building were predominantly negative. I add up to a record of intensive economic In short, the pre-colonial economy in shall consider only such features of these dislocation affecting very large parts of its normal functioning did not generate negative developments as are relevant to the territory and spread over a period large groups of half-starving people. the present enquiry. In the Presidency of of some 150 years. Compared to these However, the recurrent shocks to the Bengal, both the early efforts of the Com- annals of desolation, earlier catastrophes system regularly threw groups out of the pany to organise a regular flow of revenue appear to have been either brief or rela- system reducing them to penury, but such and the less orderly rapacity of its ser- tively superficial rendering a return to groups accounted for a relatively small vants. some of whom came out to India status quo ante a comparatively easy task. part of the population. The warfare and on a pay of a few pounds a year and went No doubt the gradual establishment of

804 ECONOMIC AND POLITICAL WEEKLY May 4, 1985 a modern and orderly administration centrate on the broad contours of the overall pattern of stagnation in the struc- healed many of the wounds inflicted by economic record which are fairly uncon- ture of the economy and per capita in- the long period of disorder and direct troversial. The record, it deems, is one of come, seen against a background of slow plunder. But perhaps not all wounds were modest quantitative expansion, mainly in but substantial population growth in the effectively healed. Two of the most pro- traditional agriculture, in response to long period. But, as we have seen, positive sperous regions of the Mughal days demand in the world market and some movements in the economy since 1947 emerge as agricultural lame ducks of the deepening of the domestic market have left mass poverty untouched. Hence, modern era. Efctcrn UP, the erstwhile through infrastructural investment and for a sufficient explanation, we have to 'garden of India1 according to the Com- other factors. Since throughout the 19th look beyond the facts of stagnation. pany's observers, remalns an impover- century, the area under cultivation was Such limited growth as the Indian ished area. In Bengal, during the period extended at a rate higher than the rate of economy experienced in the 19th and first for which statistics are available, there population growth, it is likely that the half of the 20th century was heavily con- was an absolute decline in the production ^tension was achieved by taking up the centrated in the agricultural sector, the of foodgrains. These were two territories siack in Labour supply Diversion of development of modern industry being which had suffered most from intensive labour from manufacture, some of insignificant in per capita terms. The 1 though short-lived plunder. A causal con- which could not cope with the compC*. " benefits of growth in agriculture were not nection between these two sets of facts is tion of machine manufactures, may have- only unevenly distributed, but emerged not improbable. A different consequence contributed to the process. But since the within an institutional framework which of the catastrophes is more germane to evidence does not suggest conclusively was unfavourable to the majority depen- the present discussion. The rehabilitation any absolute or perhaps even relative dent on agriculture for a livelihood. For of the most vulnerable elements in society decline in employment in the manufactur- the most vulnerable, it was positively after any economic dislocation was the ing sector in the long period, it is safe t< ruinous. To facilitate collection of most difficult and least likely part of post- assume that substantial extension of revenue, and to guarantee proprietary war and post-famine situations. As will cultivation under conditions of modest rights, considered the surest way of im- be argued later, the political economy of population increase meant some increase proving agriculture, the colonial govern- colonial India, even its most constructive in output per worker, modified by the ment introduced tenurial systems which elements, was heavily tilted against the taking up of less fertile land under cultiva- conferred legally guaranteed proprietary have-nots. The flotsam and jetsam tion. Judging by the statistical evidence right in land on about four per cent of thrown up by the disintegration of one of the later period, 1890s onwards, in- the population directly dependent on empire and the establishment of another crease in the productivity of land was agriculture. This new proprietary class are unlikely to have returned to any infinitesimal, though the benefits of was by and large identical with the old orderly economic existence. We know movement to higher value crops and 'superior rights' in land who did exercise that the Famine of 1770 generated large specialisation are likely to have increased even the right of alienation wherever a groups of desperadoes in Greater Bengal. the value of yield per acre. Taken with the land market developed. But in the pre- We also know that Pax Britannia even- growth of a modern sector and a very colonial traditional order, the hereditary tually curbed them. It is unlikely however substantial expansion of trade (in ab- usufractory right of the other agricultural that the disarmed bandits became once solute rather than per capita terms), there classes—e g, those in the position of more modestly prosperous agriculturists, were modest increses in per capita income hereditary 'tenants' paying customarily rather than destitutes earning a precarious of about one per cent or less per annum fixed amounts—was inviolable. Now, the living. Those who shared a similar fate between 1891 and 1911. Any estimates for right to use land had to be purchased with in other parts of the sub-continent were earlier periods are highly undependable the market controlled by some four per certainly numerous. A prolonged period guesswork. It was believed until recently cent of the population earning their of economic chaos had generated a nume- that when for the first time the popula- livelihood from land and very little rous army of paupers. Circumstantial tion began to increase at a steady, though guarantee for any rights below that level. evidence suggests that the efforts at still very modest, rate of around 1.3 per Even in a situation of plentiful supply of reconstruction must have reinforced their cent after 1921, per capita income began land and shortage of manpower, this economic vulnerability. to fall. While this view has been question- arrangement gave the proprietary class an ed, the picture that emerges is at best one immense advantage in bargaining. As NEW INSTITUTIONAL FRAMEWORK OF of near stagnation. In the first half of the population began to increase, without any AGRICULTURE 20th century, agricultural output per corresponding expansion of employment In many ways, the Indian economy capita declined and the decline in the pro- outside agriculture, that advantage was continued along its familiar path until duction of foodgrain was substantial. Net steadily augmented. Remedial legislation 1813; only its course was modified by the imports did not adequately make up for to protect the non-proprietary classes— series of shocks spread over a long period this decline, so that the availability per but never the bottom strata who had no which generated, inter alia, a hard core capita also declined. This record of legally recognised rights—became of . After 1813, with the modest quantitative growth in traditional necessary as early as the 1850s, long abolition of the Company's monopoly, agriculture tapering off as the population before pressure of population had the region is drawn, under conditions of began to increase at a steady rate, has to become a problem. Given the expenses colonial control, into the international be placed in the context of structural and the complexity of the new legal economic network created by industrial stagnation. Even the most optimistic system, only the more affluent and capitalism. The causal relationship of this estimates do not suggest that the ratio of sophisticated could take advantage of fact with the articulation of the charac- agriculture to other sectors as sources of these legislations which often remained no teristic features of underdevelopment re- income and employment underwent any more than dead letters. Under the older mains a subject of debate. For purposes mentionable change over the entire system of arbitration which the new laws of the present discussion it is not essential period. The most important sources of had replaced, no party in a dispute was to get drawn into it. We can instead con- mass poverty are to be found in this entirely ruined. Now it was everything or

805 May 4, 1985 ECONOMIC AND POLITICAL WEEKLY nothing. For the poor and weak, it was only the new institutional arrangements, a half or more of the rural population. but even the positive developments in often nothing. In the early stages of [This paper was presented as a Silver Jubilee agriculture, augmented that disparity, British Indian revenue history, the situa- Lecture at'the Institute of Economic Growth, often directly at the cost of the weaker tion was further complicated by exces- .] sively heavy revenue demand which sections. Development of a market for meant either abandonment of cultivation cash crops and investment in irrigation as in the Madras Presidency or the burden were the two main levers of growth in being passed on as far as practicable to agriculture. The former implied a change IPCL Denies Shortage of LDPE the rent-payer. in the ratio of non-food crops to food EMERGENCE OF MASS POVERTY crops until, with increases in population, INDIAN Petrochemicals Corporation the output of foodgrains per head of Limited (IPCL), a public sector company, Besides, the British with their superior population declined sharply. The decline has affirmed that there is no shortage of efficiency of organisation, completed was especially marked in rice and the LDPE in the market. IPCL released 25 within a remarkably short time, a process inferior cereals like jowar and barja which per cent more material in the first 11 which had been unfolding itself at a slow constituted the chief diet of the poor. As months of 1984-85 over the corresponding pace under the Mughals—the collection already stated, not only output, but period of the previous year. As against the of revenue in cash. Every agricultural pro- availability also declined. Even in normal total supply of 115,000 tonnes during ducer was now under pressure to sell a times, the marginal holders of land ceased 1983-84, it was expected that there would share of the produce at least equivalent to produce enough to meet their subsis- be a total supply of over 130,000 tonnes to the revenue demanded. The marketing tence requirements. And given the un- by the three producers during 1984-85. organisation and credit facilities did not favourable conditions in the market for The most optimistic demand estimate for expand at any correspondingly fast rate. thier labour, they had no purchasing 1984-85 was of 139,000 tonnes which The agricultural producer hence experi- power to make up for that short fall. The would leave only a small gap between de- enced conditions extremely unfavourable landless were, almost certainly, even worse mand and supply. During the quarter to him; a dependence on near-monopso- off. All available levers of social power January/March 1985, there was to be a nistic buyers of his produce and near- were manipulated to fossilise this pattern total supply of nearly 40,000 tonnes which monopolistic suppliers of credit under of relationship which placed the affluent was more than the average requirement of usurious conditions, poor returns for producer of or dealer in cash crops in a the market. Due care was taken by IPCL. one's harvest, high rents and insecurity position of advantage through the abun- to ensure supplies of sufficient quantities of tenure became the usual experience of dant supply of cheap labour and the of LDPE as per the monthly allocation the mass of agricultural producers. The share-cropper's meek acceptance of harsh during March and April this year. legal system with its awesome respect for terms. Where irrigation provided the All this has become possible since there the holiness of contracts, provided more means for increasing productivity, those was an opening inventory of over 12,000 power to the elbow of the canny and in control of large holdings, especially if tonnes and IPCL's production during resourceful merchant-moneylenders. As they were proprietors, tried and increased 1984-85 was expected to be over 100 per an end result, the small-holders, both their holdings* often at the cost of the cent of rated capacity. In order to supple- tenants and proprietors, were deprived of poorer agriculturist who was in any case ment the local availability of LDPE and nearly all their surplus, if not actually hesitant to forego the production of sub- with a view to sustaining the growth in reduced to landlessness. The army of the sistence crops to take up the riskier ven- some key sectors, IPCL also imported landless, already in existence, if on a ture of cultivating non-foodgrains. The 20,000 tonnes of LDPE. To further aug- relatively small scale, through the foreclosure of grazing lands and extension ment the supplies, IPCL has also applied economic dislocation of earlier times, of the arable into forest areas in response for import licence for additional 10,000 found new recruits among the bottom to the new incentives deprived the poorer tonnes. The full demand of priority sec- strata of the agrarian society, especially agriculturist of crucially important tors such as agriculture, milk/milk pro- the agrestic slaves and serfs of the South resources. If this was the situation now duct packaging, fertiliser packaging, food- who now had to earn their livelihood by in normal times, upheavals like the grain storage, nursery sectors, etc, has selling their labour. The increasing famines and the crisis of '29 displaced been satisfied. The requirement of nearly pressure on land through increase in large groups from their marginal means 6,000 customers was met in 1984-85 by population meant that they had to sell it of livelihood, depressing wages and allocating the higher of the offtakes by the under highly unfavourable conditions, creating a steady flow of slum dwellers customers during 1982-83 and 1983-84. rendered all the more grim by the social into the urban areas. After the crisis of Even new customers were supplied small hierarchy of rural India which rendered 1929, the number of slum dwellers in quantities of the product from time to any resistance to the privileged virtually Madras, to give one example, increased time. impossible. on a massive to account for one-third of the city's The price of IPCL polymer products is scale, affecting the marginal holder of population. The small and stagnant the same at all stock points throughout land as well as the landless, was an secondary and tertiary sectors provided the country. This was done mainly to help established fact of Indian life already by no stable means of livelihood for this small customers to draw their requirement the 1860s. The recurrent famines of that growing army. Rural poverty had spilled conveniently at a uniform price through- decade and the 1890s, which augmented over into urban areas. The all too familiar out the country. Of the 6,000 processors, through high prices the resources of phenomenon of today's mass poverty was 72 per cent buy less than one tonne a traders and moneylenders reinforced this an established fact of life by the time month and another 23 per cent buy less pattern of misery, population began to increase at a steady than five tonnes a month. The market is Disparities in wealth and income, partly pace. Given the pyramidal structure of thus predominantly in the small scale sec- linked to the traditional hierarchy of rural society, there was a concentration tor, IPCL's distribution policy is designed rights in land, were no doubt always a of the increasing numbers in the lower to serve the interests of this sector which feature of India's agrarian society. Not rungs, until the very poor accounted for is spread over all parts of the country.

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